China’s State Council met earlier this week with the government administered Assets Supervision and Administration Commission to discuss the criteria by which to include financial firms on a “negative list” of companies banned from investing in the financial sector, as Beijing maintains its focus on reducing risk in China’s financial sector.
The list, which is due to be compiled by the end of the year, according to government sources, will cover companies with loss-making core businesses, high asset-to-liability ratios, or which conduct high-risk operations in supplement to their core business.
The meeting of the two administrative bodies doubled down on the need to limit risk in other areas such as debt and the overseas businesses of Chinese companies, reports Caixin. It was also agreed that public-private partnerships will need greater oversight to prevent the possibility of local governments abusing them as an opportunity for extra borrowing.
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